Labor vows to oppose NSW power sell-off

Updated
June 10, 2014 13:06:00

The Opposition Leader in New South Wales, John Robertson, has vowed to oppose the expected decision by the State Government to proceed with at least a partial sell-off of the electricity networks. Mr Robertson has rejected Treasury commissioned advice from Ernst and Young which shows power prices are higher in states where the assets remain in government hands. He has also told The World Today he expects to win next March's state election on the back of opposing any sell-off.

ELEANOR HALL: The Coalition Government in New South Wales is set to reveal later today which way it'll jump on privatising the state's electricity networks.

There's no doubt the Liberal Premier, Mike Baird, wants to sell off at least half of the power grid and use the billions of dollars raised to invest in infrastructure.

He's also hoping to tap into a financial incentive from the Federal Government to privatise state-owned assets.

Standing in the Premier's way are sections of the National Party.

That Coalition partner is worried a sell-off will lead to massive job losses in the bush and price hikes everywhere.

The New South Wales Opposition leader John Robertson has previously blocked the Labor Party's own attempts to privatise power and he's vowing to campaign hard on it again.

Mr Robertson is speaking here to our reporter, Simon Santow.

SIMON SANTOW: John Robertson, it's a lot easier to say no to something like electricity privatisation. Why can't you say yes?

JOHN ROBERTSON: Because electricity privatisation's going to lead to significant increases in prices for families and businesses and leave the state with $1 billion less every year, meaning less money to invest in new schools and new hospitals.

SIMON SANTOW: Now, you say significant prices; New South Wales Treasury, which is not the Government itself, commissioned independent analysis by Ernst and Young, and they found indeed the opposite, that prices have dropped in places where the networks have been privatised.

JOHN ROBERTSON: There's an old saying about he who pays the piper calls the tune.

If I'm going to take any advice about power prices I'm going to take it from the Australian Energy Regulator, whose report released in February this year showed that, in fact, the most expensive power bills are in South Australia - a fully privatised network - and that New South Wales and Victoria are broadly the same.

SIMON SANTOW: So you reject entirely the work of Ernst and Young?

JOHN ROBERTSON: I would back the Australian Energy Regulator over this report.

A report commissioned by Treasury is always going to be governed by the terms of reference that are set for it. The Australian Energy Regulator's whole function is to oversight the national electricity market, and when the energy regulator says that South Australia has the highest electricity prices in the country, a fully privatised network, and comparing like-with-like, that New South Wales and Victoria basically have the same power charges, despite the fact that the New South Wales network is four times larger than Victoria, I think speaks volumes about the Treasury's motivations and the Baird Liberal Government's motivations with this report.

SIMON SANTOW: Do you accept though that New South Wales is crying out for a large cash injection to build infrastructure and that the selling off of the electricity networks would deliver that?

JOHN ROBERTSON: This is a flawed concept that's not going to create a long-term sustainable position for New South Wales, and somehow suggesting that you can sell off an asset that generates revenues to the states of, on average, $1 billion every year is going to leave us in a better position just doesn't stand up to a test.

SIMON SANTOW: But an asset that is not necessarily as efficient as it could be.

JOHN ROBERTSON: Well, I'd dispute that Simon. In fact, what you see in places like South Australia and Victoria is that they have load-shedding at peak times during summer. So their network hasn't been maintained in a fashion that on the very hot days they can continue to provide electricity to consumers across the state.

SIMON SANTOW: So are you suggesting that a privatised network would see blackouts at times in New South Wales?

JOHN ROBERTSON: I'm saying that in South Australia and Victoria, we see load shedding, which is effectively people being told that their power will be turned off for anywhere up to 45 minutes to an hour at peak times.

Now, that's what we see already with privatised networks in South Australia and Victoria; it's something that is in long gone history in New South Wales, and that's because of strategic investment over time to ensure that our network can sustain itself and deliver affordable, reliable power to businesses and consumers every day of the week.

SIMON SANTOW: How will New South Wales come up with the money it needs to invest properly in infrastructure if it can't privatise?

JOHN ROBERTSON: Under a Labor government, it won't be through the privatisation of our poles and wires, unlike Mike Baird, who's got a very short-sighted view, a view that's focused very much on the March 2015 election, instead of looking at long-term view about maintaining these assets, a natural monopoly and making sure that the dividends that they return continue to go towards building schools and hospitals that are much needed in New South Wales.

SIMON SANTOW: If we end up with somewhat of a compromise later this afternoon when the Government reveals its position and that the country provider, Essential Energy, is left in government hands but the city providers are privatised, will you accept that?

JOHN ROBERTSON: Anyone who thinks that you can partly privatise these assets and it's going to stop there is living in fool's paradise. Once you start privatisation, it doesn't finish until the whole thing has been sold off.

SIMON SANTOW: What's your reading of the crossbenchers in the New South Wales Upper House? Do you they look favourably upon the prospect of privatising power?

JOHN ROBERTSON: I've not even talked to the crossbench about this. My view is that there is a very stark contrast between the Liberal Government in New South Wales and what Labor brings to the table at the March 2015 election.

ELEANOR HALL: And that's the Leader of the Opposition in New South Wales John Robertson speaking to Simon Santow.